Grainger W W (GWW) has reported a 6.41 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $174.74 million, or $2.93 a share in the quarter, compared with $186.71 million, or $2.98 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $171.59 million, or $2.88 a share compared with $199.24 million or $3.18 a share, a year ago.
Revenue during the quarter went up marginally by 1.38 percent to $2,541.13 million from $2,506.54 million in the previous year period. Gross margin for the quarter contracted 159 basis points over the previous year period to 40.11 percent. Total expenses were 88.37 percent of quarterly revenues, up from 87.35 percent for the same period last year. That has resulted in a contraction of 102 basis points in operating margin to 11.63 percent.
Operating income for the quarter was $295.49 million, compared with $317.09 million in the previous year period.
However, the adjusted operating income for the quarter stood at $290.25 million compared to $336.58 million in the prior year period. At the same time, adjusted operating margin contracted 201 basis points in the quarter to 11.42 percent from 13.43 percent in the last year period.
"Overall, the first quarter clearly fell short of our expectations, driven primarily by the stronger than anticipated customer response to our U.S. strategic pricing actions, with a greater volume of products sold at more competitive prices," said chief executive officer DG Macpherson. "Based on the positive customer response thus far, we are pulling forward the remaining pricing actions originally scheduled for 2018 into the third quarter of this year. This decision requires a significant change to our earnings per share guidance for the year but should enable us to accelerate growth with existing customers and attract new customers sooner than planned."
For financial year 2017, Grainger W W projects revenue to grow in the range of 1 percent to 4 percent. The company forecasts diluted earnings per share to be in the range of $10 to $11.30.
Operating cash flow improves
Grainger W W has generated cash of $180.95 million from operating activities during the quarter, up 12.64 percent or $20.31 million, when compared with the last year period.
The company has spent $37.53 million cash to meet investing activities during the quarter as against cash outgo of $45.38 million in the last year period. It has incurred net capital expenditure of $30.46 million on net basis during the quarter, down 19.79 percent or $7.52 million from year ago period.
The company has spent $183.20 million cash to carry out financing activities during the quarter as against cash outgo of $138.25 million in the last year period.
Cash and cash equivalents stood at $238.80 million as on Mar. 31, 2017, down 14.69 percent or $41.11 million from $279.91 million on Mar. 31, 2016.
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